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Questions and Answers
What is the formula for calculating prime cost?
What is the formula for calculating prime cost?
- $ ext{Prime cost} = ext{Direct materials} + ext{Direct labor} + ext{Direct expenses}$ (correct)
- $ ext{Prime cost} = ext{Direct materials} + ext{Indirect labor} + ext{Factory rent}$
- $ ext{Prime cost} = ext{Direct materials} + ext{Indirect labor} + ext{Indirect expenses}$
- $ ext{Prime cost} = ext{Direct labor} + ext{Indirect materials} + ext{Direct expenses}$
What is the formula for calculating factory cost?
What is the formula for calculating factory cost?
- $ ext{Factory cost} = ext{Prime cost} imes ext{Factory overheads}$
- $ ext{Factory cost} = ext{Prime cost} - ext{Factory overheads}$
- $ ext{Factory cost} = ext{Prime cost} imes ext{Direct expenses}$
- $ ext{Factory cost} = ext{Prime cost} + ext{Factory overheads}$ (correct)
What is the formula for calculating total cost?
What is the formula for calculating total cost?
- $ ext{Total cost} = ext{Prime cost} + ext{Factory cost} + ext{Indirect labor}$
- $ ext{Total cost} = ext{Prime cost} + ext{Factory cost} + ext{Administrative overheads}$ (correct)
- $ ext{Total cost} = ext{Prime cost} + ext{Factory cost} + ext{Selling expenses}$
- $ ext{Total cost} = ext{Prime cost} + ext{Factory cost} + ext{Indirect materials}$
